White House approves new sanctions on Iran

The Obama administration approved further sanctions Friday on Iranian crude oil exports after determining that oil supplies were adequate to justify the new penalties.

President Obama announced the new sanctions, which were written into law by Congress and will take effect at the end of June, which actually bar foreign banks from doing business in the United States if they buy or sell Iranian crude oil.

The White House was careful not to speculate on how this would affect global oil and gas prices. A Democratic aide said that while congressional leadership had been notified of the president's decision before it became public, there was no mention of the strategic petroleum reserve in that notice.

According to a statement from Press Secretary Jay Carney, while the administration believes "the oil market became increasingly tight over the first two months of 2012" and "that tightness remains today," there still "appears to be sufficient supply of non-Iranian oil to permit foreign countries to significantly reduce their import of Iranian oil."

The State Department believes there are currently 23 countries that publicly import Iranian oil. The State Department announced exemptions from these sanctions last week for 11 of those countries. Those 11 countries (Belgium, the Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland, Spain, the United Kingdom, and Japan) have taken steps to significantly reduce their imports of Iranian crude oil.

Senior administration officials say that the exemptions list is not finalized, and they are still in consultations with allies like South Korea and Turkey about how to proceed. This was one of the issues that came up during Obama's talks with South Korean President Lee Myung-bak earlier this week when the President was in Korea for the Nuclear Security Summit. There were indications that South Korea had an interest in pursuing a reduction in importing Iranian oil and avoiding these sanctions.

Two other countries on the sanctions list, India and China, are significant importers of Iranian oil. A senior administration official says that even if these two countries do not reduce their imports, the moves by the U.S. government will put pressure on Iran "above and beyond anything it's experienced before." And the official clarified that they continue to have a dialogue with both India and China.